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Business Broker Engagement Agreement for Canada

Business Broker Engagement Agreement Template for Canada

A comprehensive legal agreement governed by Canadian law that establishes the professional relationship between a business broker and a client seeking to sell their business. The document outlines the terms of engagement, including the broker's authority to market and facilitate the sale of the business, compensation structure, confidentiality obligations, and the scope of services to be provided. It incorporates provisions compliant with provincial securities regulations, real estate and business brokers legislation, and relevant federal laws, while defining the rights, responsibilities, and obligations of both parties throughout the business sale process.

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Business Broker Engagement Agreement

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What is a Business Broker Engagement Agreement?

The Business Broker Engagement Agreement is a crucial document used when a business owner decides to engage a professional broker to facilitate the sale of their business in Canada. This agreement serves as the foundational document that governs the relationship between the broker and the client, outlining the broker's authority to market the business, interact with potential buyers, and negotiate on the owner's behalf. It includes essential elements such as exclusivity periods, commission structures, confidentiality provisions, and the scope of services, while ensuring compliance with provincial securities regulations and business brokerage laws. The document is particularly important as it protects both parties' interests and sets clear expectations for the business sale process, including the broker's responsibilities and the owner's obligations in providing necessary information and cooperation.

What sections should be included in a Business Broker Engagement Agreement?

1. Parties: Identification of the business broker and the client (seller/owner of the business)

2. Background: Context of the engagement and brief description of the business being sold

3. Definitions: Key terms used throughout the agreement including 'Business', 'Confidential Information', 'Transaction', 'Qualified Buyer'

4. Appointment and Scope of Services: Terms of broker appointment and detailed description of services to be provided

5. Exclusive Right: Terms of exclusivity granted to the broker

6. Term and Termination: Duration of the agreement and conditions for termination

7. Broker's Obligations: Detailed responsibilities and duties of the broker

8. Client's Obligations: Responsibilities and commitments of the client

9. Compensation: Fee structure, commission rates, and payment terms

10. Confidentiality: Obligations regarding confidential information handling

11. Representations and Warranties: Statements of fact and guarantees from both parties

12. Indemnification: Mutual protection and liability provisions

13. Dispute Resolution: Process for handling disagreements

14. General Provisions: Standard clauses including notices, amendments, governing law

What sections are optional to include in a Business Broker Engagement Agreement?

1. International Transactions: Additional provisions for cross-border sales including currency considerations and international law compliance

2. Tail Period: Post-termination period during which broker remains entitled to compensation for identified buyers

3. Non-Circumvention: Prevents client from circumventing broker to deal directly with introduced parties

4. Marketing Authorization: Specific permissions for advertising and promoting the business

5. Break-up Fee: Compensation if client withdraws business from sale after substantial broker work

6. Success Fee Structure: Detailed tiered commission structure based on final sale price

7. Specialist Services: Additional services such as business valuation or due diligence support

What schedules should be included in a Business Broker Engagement Agreement?

1. Schedule A - Business Description: Detailed description of the business being sold including assets, operations, and financial highlights

2. Schedule B - Fee Structure: Detailed breakdown of all fees, commissions, and payment terms

3. Schedule C - Authorized Representatives: List of authorized persons who can act on behalf of each party

4. Schedule D - Marketing Plan: Outlined approach for marketing the business

5. Schedule E - Required Documentation: List of documents client must provide to broker

6. Appendix 1 - Confidentiality Terms: Detailed confidentiality provisions and procedures

7. Appendix 2 - Service Level Agreement: Specific performance metrics and service standards

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Document Type

Broker Agreement

Cost

Free to use
Relevant legal definitions






























Clauses




































Relevant Industries

Professional Services

Business Advisory

Mergers & Acquisitions

Real Estate

Financial Services

Small Business

Retail

Manufacturing

Technology

Healthcare

Hospitality

Construction

Distribution

Professional Practices

Consulting Services

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Executive Leadership

Business Development

Corporate Strategy

Risk Management

Compliance

Business Advisory

Relevant Roles

Business Broker

M&A Advisor

Chief Executive Officer

Business Owner

Corporate Lawyer

Chief Financial Officer

Business Development Director

Investment Banker

Transaction Advisory Manager

Corporate Development Manager

Business Valuations Specialist

Due Diligence Officer

Company Director

Managing Partner

General Counsel

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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